Following the buy out, which was undertaken to ensure “continuity of service” and the “protection of jobs” as well as addressing potential monopoly concerns, Viridor retained a 15% stake in Exeter-based Devon Waste.
Valued at about 7.5 million, the Local Authority Waste Disposal Company LAWDC was originally put up for sale by Devon county council in August 2002 with the council seeking a private company to provide “alternative means of waste disposal for the longer term”.
With a turnover of 12 million, Devon Waste operates three waste transfer stations and two landfill sites as well as 24 municipal waste centres across the county. The company was formed in 1991 and has 64 employees.
Viridor, which is owned by the Pennon Group, already had a strong interest in the region and some had questioned whether the company's presence could raise monopolistic issues regarding the sale of Devon Waste.
But now it has emerged that a management buy-out, financed by Lloyds TSB Acquisition Finance, has limited Viridor's stake in Devon Waste to 15% of the company.
Management team
The management team that led the deal and will continue to run the company include managing director Richard May, finance director Collin Hickling and operations manager Chris Christison.
Dan Cooke, external affairs manager for Viridor explained: “We do have a stake in Devon Waste, a 15% stake, but it will now be run by the previous team running it before the sale, including Richard May.
“The main driver behind the management buy out strategy was that Devon County Council had indicated a primary concern was the protection of jobs and employment security for employees of DWM and the management buy out team, with Viridor's assistance and stakeholding, enabled that objective to be met. This strategy also addressed any potential monopoly issues.”
He added: “We are the contractor for the county council and will sub-contract some of the work to Devon Waste Management.”
Devon waste has also been providing waste transfer and disposal services under contracts with eight district councils in the county. The management team was advised by Ernst & Young as well as solicitors Bond Pearce and Burges Salmon in the sale.
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